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The Effectiveness of Celebrity Endorsement

In today's highly competitive markets, big brands are at fight when it comes to products, each having a similar product to that of a rival. Celebrity endorsements have been extensively applied marketing tool in the international developed industries and it has proven to be contributing positively towards the economic growth of the brands. However the effectiveness of this tool has been subjected to many criticisms due to its vast application in diverse fields. The main problem therefore is the obvious use of celebrity intensive campaigns without measuring the benefits associated with using such tools. Celebrities like movie actors, television stars, and famous athletes are widely used in television advertising to influence consumers' brand choice behavior. Advertisers try to establish a link between their brands and a desirable image or lifestyle of a celebrity.

Looking at the importance of this issue, it has never been given as importance as it deserves to be, at least in our country.

Problem Definition

Celebrity endorsements have been extensively applied marketing tool in the international developed industries and it has proven to be contributing positively towards the economic growth of the brands. However the effectiveness of this tool has been subjected to many criticisms due to its vast application in diverse fields. Even developing industries like that of Pakistan have started using this marketing tool for the promotion and better positioning of their products and thus to better appeal to the different segments. After conducting several perceptual analyses, the developed countries have started evaluating the benefits associated with this type of promotional tool using complex quantitative methods and models to measure the economic benefits associated with celebrity endorsements. The current Pakistani market despite using these methods have lagged far behind in developing tools to evaluate the costs and benefits associated with celebrity endorsements. The main problem therefore is the obvious use of celebrity intensive campaigns without gauging the benefits associated with using such tools. For this purpose, the perception of the Pakistani market regarding celebrities endorsing different brands across different industries is a valuable concern. Thus, to acknowledge that if the celebrities have a positive or negative impact on consumer’s perception and if they should be used in advertisement campaigns or not.

Purpose of Research

The main purpose of my research is to provide, the marketers of leading companies in the beverage industry which are using celebrity intensive campaigns, with a perception of their consumers, regarding the use of celebrity endorsements through which they can evaluate the benefits of celebrity being used in campaigns. My research will also facilitate further study in this dimension in this field as not many current efforts have been made in this regard.

OBJECTIVES

To conduct market research through a perceptual survey to evaluate perception of consumers, regarding the use of celebrity endorsements across the beverage industry.

Research Goals

To study

Consumer perceptions about the category as a whole

Degree of awareness regarding the celebrities currently used in beverages industry

To study

Consumer’s preferences towards different attributes of the brands within the industry

Personification of the brand to highlight different personality traits associated with different brands

Which Genre of celebrity is most preferred among which SEC in terms of association with different brands in the industry.

Lastly, If a company selects a preferred celebrity, will it encourage purchase of the product among the selected SEC

LITERATURE REVIEW

McCracken's (1989) defines a celebrity as, "any person who enjoys a public recognition and who utilizes this recognition on behalf of any consumer product by coming along with it in an advert.”

A conclusion on celebrity endorsement by Alsamadi (2006) was that for making the ads more appealing marketers turn to celebrity endorsement, to influence consumer brand choice behavior. Celebrities e.g. models, actors, television stars, artists and, sport athletes that are popular among the public for their accomplishments in their respective areas, these celebrities mostly have high public recognition. They help increase awareness of advertised brands and create positive feelings towards the brand and the product.

In most cases, a celebrity is used to raise consumer awareness of a product. Once the consumer has the product in his or her hands, however, the design, quality, and price of the product are what carry out the sale, not the association with a celebrity. Celebrities get consumers to try products, not to necessarily buy products Hollander (2007).

Using celebrities brings a lot media exposure but it is expensive. The companies should consider the marketing budget and the profit margins before the selection of celebrities and on the bases of these ratios they should decide how much to spend on celebrity endorsement Hollander (2007).

According to Roll, Martin before any celebrity endorses any brand, they should consider three main aspects:

Attractiveness of the celebrity: In this principle Roll, Martin states that an attractive endorser will have a positive impact on the endorsement. The endorser should be attractive to the target audience in many aspects like physical appearance, intellectual capabilities, athletic competence, and lifestyle.

Credibility of the celebrity: Roll, Martin states that the personal credibility of the celebrity is crucial. Credibility is defined here as the celebrities’ perceived expertise and trustworthiness. The credibility factor of the celebrity greatly influences the acceptance with consumers.

Meaning transfer between the celebrity and the brand: The success of the brand-celebrity association heavily depends on the compatibility between the brand and the celebrity in terms of identity, personality, positioning in the market.

Celebrity endorsements alone cannot replace the conventional brand building processes. Celebrity endorsement is just a channel of communication there when all other steps in the branding process are followed and implemented, then the channel should be selected Roll, Martin.

Celebrities may also generate extensive PR leverage for brands. An example (Katyal) quotes is when Revlon launched the "Won't kiss off test" for its Colorstay lipsticks in 1994 with Cindy Crawford kissing reporters, the campaign featured on almost every major news channel and equally widely in the press. This brief assessment of the current market situation indicates that celebrity endorsement advertising strategies can work under the right circumstances. But it would be wrong to presume that celebrity endorsements are solution to all the problems that a marketer will face. Celebrity endorsement if used effectively, makes the brand stand out, stimulate brand recall and facilitates instant awareness. To achieve this, the marketer needs to be really disciplined in choice of a celebrity. Hence (Katyal) mentions the right use of celebrity can shoot up the Unique Selling Proposition of a brand to new heights but mismatch of celebrities can drag the firm down and its product leading to dissatisfaction from the customers and negative publicity.

Gyo Lee & Thorson (2008) provides congruity framework and theoretical basis for suggesting that possibly a mismatch between the celebrity image and product image would result in favorable responses to advertisements than either a complete match or an extreme mismatch. The Gyo Lee & Thorson (2008) study also looks at how consumer characteristics. Two experiments were conducted to test these issues using two types of match-up factors: physical attractiveness and expertise of a celebrity endorser. The results when complied show that celebrity endorsements are believed to be more favorable in terms of purchase intention for a product when there is a moderate mismatch than when there is either a complete match or a total mismatch between the two factors. These effects are found to be more effective among participants with higher product involvement than those with lower product involvement.

Although there is little doubt that a proper match between a product and an endorser can enhance the effectiveness of an advertisement Gyo Lee & Thorson (2008), it is unclear whether a match is always more persuasive than a mismatch. In the real world, there seem to be many instances of successful celebrity endorsers who seemingly have little relationship with the products they endorse.

It was also mentioned in the research by Gyo Lee & Thorson (2008) that a greater persuasiveness of spokesperson-product mismatches. For instance, when examined whether a spokesperson's image could change the images of different products. The authors found that respondents' attitudes and usage intentions for the feminine product were more positive when the product was endorsed by a male spokesperson rather than a female spokesperson. Likewise, the use of a female spokesperson yielded more favorable attitudes and greater usage intention for the masculine product (i.e., beer) compared with the use of a male spokesperson.

RESEARCH METHODOLOGY

The research will be based on both primary and secondary data. Questionnaires will be designed as for to find the primary data and secondary data will be obtained from the sources with their respective sources . All those papers downloaded from digital library will help in formulating the literature review of my study.

Research Design

The research is conclusive in nature comprising descriptive study. The sampling technique employed is non-probabilistic convenient sampling, kept in mind that the sample selection would not be representative of the population due to the limitations and keeping in mind the academic nature of the project.

Questionnaires

Questionnaires will be developed in light of the research goals mentioned earlier as well as the results of the initial qualitative research. 100 survey questionnaires will be distributed in the city of Islamabad among respondents as per the sampling plan.

Sampling Plan

Sampling plan consists of male/female individuals, above the age of fifteen and roughly below the age of fifty, with household income of Rs.15,000 or above.

Sampling Frame

The sample will be selected from within Islamabad which will be the sampling frame. The sampling process will be a multi stage sampling process. Initially, the population will be divided into three categories based on household income. The second stage of the sampling process will consist of randomly selecting areas/institutions in Islamabad (which would be occupied with people belonging to different SECs) for distributing the survey questionnaires.

Sampling Technique

Non-Probability convenience sampling will be employed keeping in mind the limitation of resources and the academic nature of the project.

Sample Size

A sample size of 100 will be determined for this research. The sample cell-wise distribution in three sections will be done demographically based on the income level of the respondents. SEC-A consists of household income of Rs. 60,000 Plus. SEC-B consists of household income of Rs.35,000 - 60,000. While SEC-C consists of household income of 15,000-35,000.

Variables:

Dependent Variable: -

With respect to the topic of the research “effectiveness of celebrity endorsement” is a dependent variable.

Independent variable: -

With respect to the research “Celebrity endorsement” is an independent variable and objective is to investigate its effect on Customer Behavior.

Cause and Effect Relationship: -

Cause is independent variable and effect is dependent variable. As per the research topic “effectiveness of celebrity endorsement” is the cause and “Changes in Customer Behavior” is the effect.

Theoretical framework :

Hypothesis :

There is a positive relationship between using a known and famous celebrity in advertisement and consumers awareness about the product.

There is correlation between celebrity and influence on the consumers. Which means celebrity endorsement will have a positive influence in consumers buying behavior.

Timeline:

Phase1:1st few chaps to be delivered by december 2010

Phase2:questinnaire analysis to be delivered by april 2011

Phase3:final project presentation and report to be submitted by june 2011.

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